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Rep. Meeks Questions SEC on Board Diversity and Dual Class Stock Structures at Oversight Hearing

June 21, 2018
Press Release
Cmmr. Clayton Confirms SEC Restored Board Diversity Disclosures to Rulemaking Agenda; SEC Considering Recommendations to Enhance Disclosures Surrounding Dual Class Stock Structures

 

Washington, DC – Today, U.S. Representative Gregory W. Meeks, a senior member of the House Committee on Financial Services, questioned the Commissioner of the U.S. Securities and Exchange Commission (SEC), Jay Clayton, on the agency’s intentions to improve its board diversity disclosure rule, as well the agency’s plans to adopt investor protections around dual class stock structures.

Rep. Meeks has petitioned the SEC through multiple letters requesting that the agency enhance its board diversity disclosure rule.  Over the years, investors and public retirement plans have found the current rule to be unhelpful in determining the composition of corporate boards, especially with respect to the race, gender, and ethnicity of their directors.

During Congressman Meeks’ questioning, Commissioner Clayton confirmed that the SEC has restored the board diversity rule’s place on the agency’s rulemaking agenda after previously removing the item.  Congressman Meeks looks forward to working with the SEC to ensure that any future rule results in more robust disclosures so investors can better hold companies accountable for lack of diversity at their director level.

Rep. Meeks also questioned Commissioner Clayton on his personal opinion surrounding dual class stock structures.  Rep. Meeks highlighted recent articles about Facebook shareholders revolting because of the outsized voting powers of their founder.  While the Commissioner stated that there are times when such structures are appropriate, the SEC is considering recommendations to enhance disclosures around such structures so investors can better grasp the risks associated with them. Rep. Meeks welcomes the Commissioner’s response and will continue to monitor the SEC’s work in this space.